A good financial statement analysis report often includes the following sections: Executive summary, analysis overview, evidential matter, assumptions, key factors and inferences.

A high level of expected risk suggests a low price-earnings ratio.

A materials requisition is a source document used by materials managers of a manufacturing company to order raw materials from suppliers; it serves the same purpose as a purchase order in a merchandising company.

Process and job order manufacturing operations both combine materials, labor, and overhead items in the process of producing products.

In process cost accounting, materials are always classified as indirect if they are not physically incorporated into the final product.

If a company uses predetermined overhead rates, actual manufacturing overhead costs of a period will be recorded in the Manufacturing Overhead account, but they will not be recorded on the job cost sheets for the period

In process cost accounting, the classification of materials as direct or indirect depends on whether they are clearly linked with a specific process.

Horizontal analysis is used to reveal changes in the relative importance of each financial statement item.

Common-size statements are financial statements of companies of similar size.

The cost of goods manufactured is calculated by adding the amount of work in process at the end of the year to the cost of raw materials used, direct labor worked, and manufacturing overhead incurred for the year and then subtracting work in process at the beginning of the year.

Rent on a factory building used in the production process would be classified as a period cost and as a fixed cost.

An out-of-pocket cost requires a future cash outlay and is relevant for decision making.

Decentralization means the delegation of decision-making authority throughout an organization by allowing managers at various operating levels to make key decisions relating to their own area of responsibility.

Materials requisitions and time tickets are cost accounting source documents.

The Factory Overhead account will have a credit balance at the end of a period if overhead applied during the period is greater than the overhead incurred.

A clock card is a source document that an employee uses to report how much time was spent working on a job or on overhead and that is used to determine the amount of direct labor to charge to the job or to determine the amount of indirect labor to charge to factory overhead.

A manufacturer's cost of goods manufactured is the sum of direct materials, direct labor, and factory overhead costs incurred in producing products.

A variable cost changes in proportion to changes in the volume in activity.

Although direct labor and raw materials costs are treated as manufacturing costs and therefore make up part of the finished goods inventory cost, factory overhead is charged to expense as it is incurred because it is a period cost.

A rough guideline states that for a company with no discounts offered, days' sales uncollected should not exceed 1 times the days in its credit period.

A process cost summary for a production department accounts for all costs assigned to that department during the period plus costs that were in the department's Goods in Process Inventory account at the beginning of the period.

Working capital is computed as current liabilities minus current assets.

Market prospects are the ability to provide financial rewards sufficient to attract and retain financing.

Managerial accounting is not needed in a non-profit or governmental organization

Traditionally, companies have maintained large amounts of raw materials, work in process, and finished goods inventories to act as buffers so that operations can proceed smoothly even if there are unanticipated disruptions.